CHARLESTON, W.Va. — It’s a reserve account designated for emergencies, but there’s still disagreement at the State House about whether West Virginia’s current financial situation is the kind of catastrophe meriting a $120 million dip into the Rainy Day Fund.
“I’m very glad that we had a savings account where we didn’t have to cut services for children or seniors or whatever the case may be to get us over this little bump in the road,” said House Majority Whip Mike Caputo (D-Marion, 50) who supports the move to plug a budget hole.
Caputo said what’s taken will be returned to the Rainy Day Fund once the state’s budget improves. Analysts have projected a turnaround after the next budget year.
But Senator Mitch Carmichael (R-Jackson, 4) said lawmakers are setting a dangerous precedent by dipping into the Rainy Day Fund, for the first time, to balance the budget instead of further cutting spending or raising taxes — both tough sells in an election year.
“It’s not for a capital expenditure or for any other expense that is a one time expenditure. We built, into this fund, baseline budget building (including) raises for public employees and others things,” said Carmichael.
Last week, lawmakers approved the new state budget with the Rainy Day Fund money. That budget includes $1,000 across-the-board pay raises for teachers, two percent raises for other school service personnel and $504 for other state workers.
Carmichael said he’s concerned about the effects of the move on the state’s bond ratings which are partly based on reserve amounts.
Both Caputo and Carmichael debated the issue on Monday’s MetroNews “Talkline.”
Governor Earl Ray Tomblin had originally proposed taking $83 million from the Rainy Day Fund. The amount approved last week in the budget for 2014-2015 — the fiscal year that starts on July 1 — will work out to about a $120 million reduction to the Rainy Day Fund.
The fund currently stands at about $920 million and is considered to be one of the strongest in the United States.